Deadlock between the United States and India finally derailed talks on a new world trade pact on Tuesday, delegates said, as ministers quit without a deal after more than a week of bitter wrangling.

"The package that we were able to negotiate and agree on Friday night is not going to carry the day," US Trade Representative Susan Schwab told reporters as she left a meeting of key trading powers, referring to an earlier breakthrough on a deal proposed by WTO chief Pascal Lamy.

Ministers had struggled for more than a week to solve differences on subsidies and import tariffs for a new deal under the World Trade Organization's Doha Round, which has repeatedly foundered since its launch seven years ago.

Delegates said negotiations stumbled on proposals for so-called SSM measures to protect poor farmers that would impose a special tariff on certain agricultural goods in the event of an import surge or price fall.

"They (the United States) have refused to move on SSM. It is an issue of vital importance to us," an India diplomat told AFP as Tuesday's meeting of seven key countries dissolved.

The world's economic superpower, the United States, and India, one of the world's biggest emerging economies, were sharply divided over the SSM - the special safeguard mechanism.

"The United States and India did not accept the compromise proposals, and arrived at an impasse," a source close to the talks told AFP, adding that the negotiations had broken down.

Some developing countries such as India wanted the mechanism to kick in at a lower import surge level than has been proposed in order to protect their millions of poor farmers from starvation.

Others wanted it to take effect at a higher rate so as not to hurt exporters.

Sources said after Tuesday's breakdown that the United States was stalling for time to avoid a rift over another sticking point, cotton subsidies.

"The US cannot afford to give way on cotton, so it does not even want to go into the issue on cotton," an Asian diplomat told AFP.

"By holding firm to its line on SSMs, it knows that India would not give ground on SSMs, in which case India would be blamed in case of any collapse," the diplomat added.

India's Commerce Minister Kamal Nath had dug in his heels over the proposed tariff thresholds, claiming the backing of around 100 developing nations.

With both sides refusing to give way, acrimony had grown on Monday with the United States publicly accusing India and China of holding up progress.

Schwab described Tuesday's decisive meeting as "very disappointing."

"Throughout the last 10 days, and in the months and years prior to this, the United States have shown leadership in trying to get this done. We remain committed to the Doha round. US commitments remain on the table, awaiting reciprocal responses. It is critical that we move forward," she said.

"The gulf between the major parties on the SSM was too wide to bridge. That was the issue that has prevented these talks moving forward to conclusion," New Zealand Trade Minister Phil Goff said, however.

He gave a dim forecast for the future of the world powers' bids to strike a trade liberalisation deal.

"We won't see a conclusion to the round this year," he told reporters as he left the meeting.

"There's no better deal coming along," the European Union's Trade Commissioner Peter Mandelson said before Tuesday's breakdown. "You have to consider if this fails what (countries) would lose," he added.

"They'll lose agricultural reform in the developed world, they'll be losing many opportunities and some protection for developing countries," said Mandelson.